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SARS Emigration process changes

The South African Revenue Service (SARS) has announced changes to its Tax Compliance Status process with immediate effect.

Tax Consulting SA said that the new changes include important ones related to emigration, where SARS has introduced an application called “Approved International Transfer (AIT)”, which will replace the existing “Emigration” and “Foreign Investment Allowance (FIA)” application types.

“The changes have already taken place on e-Filing, and it is imperative that the wider public understands the impact on the emigration process and the withdrawal of funds from South Africa to abroad,” said Tax Consulting SA.

Through SARS’ push towards making complaints easier for the taxpayer themselves, the group has released a guide to inform taxpayers of the e-filing process.

SARS said the system needed to be changed in line with international standards and its goal of further modernising.

Ultimately the updated Tax Compliance Status (TCS) system has revised what it means to be a tax complaint in terms of the system, the business process and usability of the system to drive compliance, the discontinuation of “tender” as an option for TCS request and the strengthening of the legislative alignment with the South African Reserve Bank (SARB).

The new AIT application now requires that when taxpayers apply for TCS status in respect of international transfers, they submit the following supporting documentation:

  • Specific documents showing the sources of the capital to be invested;
  • Statement of assets and liabilities for the previous three years;
  • If the taxpayer is a ‘non-resident for tax purposes, ‘ relevant proof to ceased tax residency;
  • Details of locally listed securities;
  • Applicable power of attorney where the TCS application is submitted by someone other than the taxpayer.

The full guide can be accessed here.

The tax authority has been ramping up over the past few years to make ensuring compliance the cornerstone of the institution, and as a result, it has not only made it easier to be compliant and approach them but also harsher in their investigations.

With emigration continuing to take its toll on the country’s tax base, Tax Consulting SA said that those considering jumping ship have found it increasingly difficult to do so.

Thomas Lobban, the head of individual cross-border tax at the firm, said that it is increasingly important that a taxpayer remain compliant thus giving the authority less to pick at when it comes time to cease tax residency.